Cryptocurrency Q&A
How do you find no arbitrage price?
How do you find no arbitrage price?
charlotte_wright_coder
Sun Dec 08 2024
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7 answers
1902
I'm trying to understand how to determine the no-arbitrage price. I want to know the method or process of finding this price point, where there's no opportunity for arbitrage.
7 answers
Nicola
Tue Dec 10 2024
Here, Ct represents the current price of a derivative contract.
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Martina
Tue Dec 10 2024
St denotes the current spot price of the underlying asset.
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Enrico
Tue Dec 10 2024
Xe−r(T−t) represents the discounted future value of the exercise price X at time T.
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SophieJones
Tue Dec 10 2024
The rate r is the risk-free interest rate, and t is the current time.
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SkyWalkerEcho
Tue Dec 10 2024
In simpler terms, an arbitrage opportunity arises when the condition Ct
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